Victoria
New South Wales
South Australia
QueenslandAs more businesses and organisations aim to meet their renewable energy goals, Large-Scale Generation Certificates (LGCs) are rapidly becoming a preferred strategy over other renewable energy supply options, such as certified GreenPower, International Renewable Energy Certificates (I-RECs) or Australian Carbon Credit Units (ACCUs).
For large asset owners, LGCs present a compelling case, offering not only the needed flexibility and financial advantages many organisations need, but also the transparency and traceability critical for meeting ever-growing ESG requirements.
There are a number of unique benefits of purchasing LGCs and they can present a compelling, cost-effective and efficient path to 100% renewable energy, particularly for large companies with diverse energy contracts across multiple facilities.
What are LGCs and Why are They Important?
LGCs represent the environmental value of one megawatt-hour (MWh) of renewable electricity generated. They are issued for every MWh of renewable energy produced by eligible facilities that are registered as ‘Power Stations’ by the Clean Energy Regulator (CER). Importantly, LGCs are serial-numbered and fully traceable, ensuring there is no possibility of “greenwashing” or misreporting of renewable energy claims.
These attributes make LGCs highly attractive to businesses looking to meet their scope 2 emissions reduction targets under major ESG frameworks, such as the Global Reporting Initiative (GRI), RE100, Climate Active or the Carbon Disclosure Project (CDP).
Organisations are able to trust that the certificates are valid and verifiable since LGCs are administered by the CER, who are a government body focused on quality, accuracy, and ensuring the integrity of renewable energy data.
How LGCs Compare to GreenPower & Other Renewable Strategies.
While GreenPower is a well-known and highly reputable option for businesses aiming to purchase renewable energy, it often presents several challenges, especially for large organisations with complex energy contracts and diverse sites. These challenges include:
Contract Complexity
Many businesses are locked into long-term energy contracts. Renegotiating these agreements before they end, in order to enable GreenPower use, can involve early termination fees and often higher wholesale energy rates.
Limited Availability
GreenPower is not available everywhere in Australia, and some sites, especially those within embedded networks, may find it difficult to secure GreenPower contracts without support from network operators or onsite board augmentation work.
Lack of Flexibility
GreenPower cannot be backdated, meaning companies must purchase renewable energy offsets for periods before their GreenPower contracts are active, increasing both cost and administrative burden.
By contrast, LGCs offer a simpler and more flexible solution. They can be purchased based on actual energy consumption, with no need to renegotiate existing contracts or pay termination fees. Businesses can also choose to purchase LGCs from specific renewable generation sources, providing added control over where their renewable energy is sourced and the ability to talk to the co-benefits of where their LGCs were procured from.
The Renewable Power Percentage Makes LGCs Even More Cost-Effective.
One of the key advantages of LGCs over other options available to offset an entity’s scope 2 emissions, is their cost-effectiveness, especially when the Renewable Power Percentage (RPP) is able to be taken into account. The RPP is the minimum obligatory percentage of electricity that electricity retailers must source from large-scale renewable energy generation each year, as part of Australia’s Renewable Energy Target (RET) scheme. For 2025, the RPP has been set at 17.91%.
So what does this mean for large asset owners? Simply put, the RPP means that in many cases, a significant portion of the electricity consumed by a business (often through their retailer) may already be sourced from renewable energy. Therefore, with supporting documentation from their energy retailer, businesses may only need to purchase LGCs to cover the remaining MWh of energy consumption that is not already accounted for by the RPP.
This reduces the volume of LGCs that need to be purchased, further lowering costs.
For example, if a company consumes 700 MWh of energy and the RPP covers 17.91% of that (or 125.37 MWh), they only need to buy LGCs for the remaining 575.63 MWh.
This strategic approach can offer significant savings compared to purchasing carbon offsets or GreenPower, where 100% of the energy consumption may need to be covered by the purchase of certified renewable energy or carbon offsets.
Graph 1: Cost of renewable energy options –
Grid Energy + LGC vs GreenPower vs Grid Energy
Assuming CNL site using 700MWh p.a, current market energy rates, current LGC forward curve values used for forward rates, and RPP of 17.91% has been factored in for all years.
The ESG Benefits of LGCs.
The growing importance of ESG frameworks means that businesses are increasingly under pressure to prove their commitment to sustainability. The transparency and traceability offered by LGCs make them a solid choice for organisations looking to demonstrate their renewable energy credentials to investors, customers, and other stakeholders.
LGCs are fully traceable, and because they are issued and managed by the CER, businesses can trust that their renewable energy claims are verifiable. This traceability ensures that the renewable energy has been generated from legitimate sources, eliminating any risks of greenwashing or misreporting.
As ESG reporting requirements become more stringent, businesses that choose LGCs can confidently report their renewable energy usage and scope 2 emissions reductions, knowing they have a reliable and widely recognised mechanism for verifying their renewable energy purchases.
LGCs Offer a Clear Path to 100% Renewable Energy.
For large asset owners, LGCs present a more cost-effective, flexible, and transparent way to transition to 100% renewable energy. With the added potential benefit of the RPP, LGCs allow businesses to minimise their costs while still ensuring they meet their renewable energy and ESG targets.
Whether you’re looking to reduce energy costs, avoid complex contract renegotiations, or simply meet your sustainability goals, LGCs offer a proven and reliable solution. As the demand for verified renewable energy continues to rise, now is the time for businesses to consider LGCs as their preferred strategy for achieving a greener future.
LGCs offer a reliable path to a sustainable future, and Ecovantage is here to support both their creation and procurement nationwide. Speak with a Certificate Specialist at Ecovantage today.
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Aaron Jenkins | CEO, Ecovantage
Aaron is a specialist in end-to-end solutions for medium to large energy users. This includes energy audits, technology implementation, carbon offsets and energy certificates.
